Australia's online advertising spend outgrows traditional media channels

New Frost and Sullivan finds digital advertising expenditure hit $3.74bn in 2013, up 16%, and is expected to continue outperfoming other channels between now and 2018

Australia’s online advertising market represented more than a quarter of total advertising expenditure in 2013 and outperformed all other media channels for the year despite experiencing slower growth.

Frost and Sullivan’s new The Australian Online Advertising Market: Year End Review and Market Outlook report found the country’s online advertising market grew 16 per cent in 2013 to $3.74 billion in revenue, or 27 per cent of total advertising spend. Total advertising spend for last year hit $13.9bn.

Digital advertising was the strongest performer across all types of channels, outpacing traditional media such as print, TV, outdoor and radio, although the pace of growth has slowed over the past decade. For instance, from June 2011 to June 2012 online advertising grew at a rate of 20 per cent, whereas from June 2012 to June 2013 it dropped by 4 per cent.

The leading online advertising segment was search advertising, which increased 23 per cent in 2013, followed by online general advertising, which rose 12 per cent. Online classifieds chalked up 11 per cent growth, while online directories grew by 4 per cent. Search is expected to continue to outperform the other three major online segments between now and 2018, Frost and Sullivan stated.

Not surprisingly, the fastest growing segments in the Australian online advertising market are mobile and online video, and both are expected to outperform the market significantly over the next five years. Mobile advertising, for example, is forecast to grow at a Compound Annual Growth Rate ( (CAGR) of 39 per cent between 2013 and 2018, while video advertising is expected to grow at 31 per cent.

By that time, the research group claims 70 per cent of overall advertising served on mobile devices will be to tablets. The prediction echoes the last quarterly online advertising expenditure report from the Interactive Advertising Bureau (IAB), which showed tablets representing just under half of the mobile device category.

Frost and Sullivan also noted Australia’s total advertising market is experiencing slower than average growth in 2013, a reflection of the overall below par growth of the local economy.

Given the short-term economic outlook for Australia is still uncertain, Frost and Sullivan said it expects overall advertising expenditure in FY2014 to remain relatively flat, and offered up a CAGR prediction of 2.8 per cent between 2013 and 2018 to $16bn.

“Online advertising expenditure is forecast to significantly outperform the more mature offline advertising channels [free-to-air TV, pay TV, radio, magazines, outdoor, cinema and print directories] over the next five years, with a CAGR of 12 per cent, increasing to $6.59 billion, its proportion accounting for 41 per cent of the total advertising market in 2018,” senior research manager, Australia and New Zealand ICT practice, Phil Harpur, commented.

“Strong increases in spending intentions for 2014 are predicted by advertisers across all online general advertising products, in particular for online display and email campaigns.”

Follow CMO on Twitter: @CMOAustralia, take part in the CMO Australia conversation on LinkedIn: CMO Australia, or join us on Facebook: https://www.facebook.com/CMOAustralia

Signup to CMO’s new email newsletter to receive your weekly dose of targeted content for the modern marketing chief.

Join the newsletter!

Or
Error: Please check your email address.
Show Comments

Blog Posts

Social purpose: Oxygen for your brand health vitals

If trust is the new currency, then we’re in deep trouble. Here's why.

Carolyn Butler-Madden

Founder and CEO, Sunday Lunch

Customer experience disruption: Healthcare faces a bitter pill

Over the past decade, disruptors such as Amazon, Apple and Australia’s Atlassian have delivered technology enhanced customer experiences, which for the most part, have improved customers’ lives and delivered unparalleled growth. Can they do the same for healthcare?

Alex Allwood

Principal, All Work Together

How can a brand remain human in a digital world?

Some commentators estimate that by 2020, 85 per cent of buyer-seller interactions will happen online through social media and video*. That’s only two years away, and pertinent for any marketer.

James Kyd

Global head of brand strategy and marketing, Xero

https://bit.ly/2qLgzmR Transform your life a proven digital blueprint

Okitoi Steven

How this banking group tackled a digital marketing transformation

Read more

Its great to hear that companies including JCDecaux, oOh!media, Omnicom and Posterscope Australia have all partnered with Seedooh inorder...

Blue Mushroom Infozone Pvt Ltd

Out of home advertising companies strive for greater metrics and transparency

Read more

Much ado about nothingAnother fluff piece around what it could possibly do rather than what it is doing

gve

How AMP is using AI to create effortless ‘experiences’

Read more

is it true that Consumer expectations are also changing as a result. If we trust someone with our data there is also an expectation that ...

Sunita Madan

Society will decide where digital marketing takes us next: Oracle

Read more

This Blog is Very interesting to read and thank you for sharing the valuable information about Machine Learning. The information you prov...

johny blaze

What machine learning has done for the Virgin Velocity program

Read more

Latest Podcast

More podcasts

Sign in